The need for individualization - stop things getting personal
The world fosters and encourages individuality, so why then do brands still focus on personalization?
Last month, the magnetic chief digital officer of L’Oréal, Lubomira Rochet, took to the stage at Cannes Lions 2019 to discuss digital transformation and the impact it has had driving growth for her business.
Individualisation - stop things getting personal
Rochet, noted that since investing more heavily in digital L’Oréal's revenue from e-commerce has touched 12% of total earnings and captured one-third of the total branded beauty traffic in the platform.
Despite being a 110 year-old company, L’Oréal now sees itself firmly as a digital-first company, with Rochet citing data and AI as the catalysts being used to “innovate and personalise the customer experience”.
It is at the use of the word “personalize” that we start our story. While the vision and effectiveness of Lubomira Rochet are absolutely not in question, the use of the term ‘personalization’ can be problematic. The word helps brands feel relevant and helpful, but it is often overused and can have serious limitations.
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The shortcomings of personalization
We may all be marketers, but like everyone else, we're frequently on the receiving end of our industry's efforts. We're no strangers to the same kind of emails, tailored advertising and next-best actions we inflict on everyone else, so let's not kid ourselves: our best efforts at personalization can be way wide of the mark.
No doubt we've all received a mailshot about our next car, three months after signing a new lease. And who can forget the joy of a 10% off voucher received with an expensive delivery?
Like so much that's been around for a while, personalization struggles to remain relevant. When customer-centered technology encourages ever greater individuality, personalization is an old fix to an old challenge which has since become far more acute.
People expect better from companies - a better understanding, better responses, and above all to feel like the brand's actually listening. Nothing says 'pardon?' like a tone-deaf retention email a couple of days after you've jumped ship.
Hands up - who's an individual?
The problem with personalization is that it doesn't speak to the individual. Data might tell us about our customers' transactions, behaviors and preferences. We can process that with varying degrees of precision to come up with content tweaks and recommendations. But in the context-driven digital economy, it's too clumsy: we have data that can reveal vital insights into context and relevance. If we fail to use them, we're speaking to customers' shadows.
"Individualization is the New North star for customer-obsessed organizations. Customers, not companies, determine if an experience is personalized. Without the tenets of individualization in place, digital business pros are doomed to forever miss the mark in meeting customer needs and expectations."
In the age of engagement, brands need to interact with their customers as individuals, in conversations that are personal, contextually relevant, and which build value and trust. For this we need to go beyond personalization, raising our game to achieve individualization.
It may sound like we’re playing with words, but we're talking about two fundamentally different concepts. How so? Most importantly, individualization requires a fundamental shift in thinking. With a personalization mindset, brands see customers as targets, to be identified and aimed at with the best precision available. With an individualization mindset, brands understand that customers are the center of their business, seeing each customer as a unique individual and an equal partner in a trusted value creation process with the brand. That’s a very different way of thinking – but it is the key to understanding the dynamics of the digital economy.
To get onboard with that approach you need to nail the prerequisites. Individualisation does require personalisation capabilities, but we need to go much deeper to turn it into something more valuable. Step up context and relevance.
In today’s always-connected omnichannel world, real-time context is the key driver for understanding and shaping interactions and increasingly determines their value. To understand each customer's intent, and then take the right action at the right time, you can't ignore context. You need to be able to pick up every customer signal across all channels and touchpoints. You need to understand the in-the-moment context for each customer and take the appropriate relevant action.
Acting on data without customer context is of limited value and can lead to the wrong interpretation, which can be risky and potentially very costly. Understanding context informs an interaction that will be relevant for the customer and help to drive value and trust.
The secret to succeeding with customer engagement, and exploiting the tremendous opportunities it presents, is being able to relate to your customers as individuals. This means understanding the importance of real-time context and actionability - identity-based in-the-moment contextual insight reigns, creating the optimal value-driven conversation at each point of interaction along the customer journey.
Stand on a higher platform
If you're attempting all that with existing personalization solutions, it’s time to rethink. The critical importance of context and relevance means that individualization can only happen where there's the technology to both determine them and factor them into the decisions and customer engagement processes.
It's a tall order, and most solutions come in well under the bar. The truth is that you only grasp context and relevance if you can see the full customer journey, and you can only see that from a platform built on complete access to the brand's customer data sources.
To exceed expectations in the age of the engagement, brands need to focus on individualization, not personalization. Making that reality means creating individual customer relationships based on shared value creation. At scale, it demands technology built for purpose to nurture them.
Jason Hemingways is chief marketing officer, Thunderhead